Digi Power X Q1 2026 Earnings Call Transcript

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Provided by Quartr
May 15, 2026

Key Takeaways

  • Positive Sentiment: Adjusted EBITDA turned positive in Q1 2026 at $1.1 million, versus a $1.3 million loss a year ago, suggesting improving operating momentum even as the company winds down legacy mining revenue.
  • Positive Sentiment: The company highlighted a very strong balance sheet, with no long-term debt and management citing roughly $125 million of cash plus about $15 million of digital assets as of May 15, 2026.
  • Positive Sentiment: Digi Power X said its AI pivot is now producing revenue, with NeoCloudz GPU-as-a-service beginning first revenue in May 2026 and the first GPU bare-metal delivery already completed to a customer.
  • Positive Sentiment: Management emphasized significant infrastructure and power advantages, including about 393 MW of secure capacity across owned sites and progress toward the Columbiana, Alabama AI campus being ready for service in late 2026 to early 2027.
  • Neutral Sentiment: The company laid out an aggressive multi-year growth target, projecting about a $300 million annual run rate in 2027 and up to $800 million-$1 billion by 2029, while expecting future expansion to be financed more through debt to reduce dilution.
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Earnings Conference Call
Digi Power X Q1 2026
00:00 / 00:00

Transcript Sections

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Operator

Good morning, and welcome to DigiPower X Inc.'s 1st quarter 2026 financial results conference call. Please note that this event is being recorded and a transcript will be available on DigiPower X inc.'s website. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. Unless otherwise noted, all amounts referred to during the call are denominated in U.S. dollars. Certain comments made during this call may include forward-looking statements or forward-looking information within the meaning of applicable U.S. and Canadian security laws. Such statements and information reflect current expectations and, as such, are subject to a variety of risks and uncertainties that could cause actual results to differ materially from current expectations.

Operator

Those risks and uncertainties include, but are not limited to, factors discussed in DigiPower X inc.'s report on Form 10-Q for the 3 months ended March 31, 2026, and the annual report for the year ended December 31, 2025, as well as the company's other disclosure documents. Except to the extent required by applicable law, DigiPower X undertakes no obligation to publicly update or review any forward-looking statements or information. During the call, management may make reference to certain non-GAAP financial measures that are not separately defined under GAAP, such as EBITDA and adjusted EBITDA. Management believes that those non-GAAP measures, when considered in conjunction with GAAP financial measures, provide useful information for both management and investors.

Operator

Reconciliations between GAAP and non-GAAP measures are presented in the table accompanying the press release highlighting DigiPower X financial results as the quarter ended March 31, 2026 have been filed and made accessible under the company's continuous disclosure profile on SEDAR+ at www.sedarplus.ca and are also available on the SEC's EDGAR website at www.sec.gov/edgar. I would now like to turn the call over to Michel Amar, CEO of DigiPowerX. Thank you. Please go ahead.

Michel Amar
Chairman and CEO at DigiPower X Inc.

Good morning, everyone, and thank you for joining us today. Our Q1 2026 results underscore a transformational year in which the company strengthened its balance sheet, commenced the ramping down of its cryptocurrency mining, and positioned itself as a capital-light infrastructure scale AI computing platform with a clear path to nine-figure annual revenues. First quarter 2026 financial highlights. Three months ended March 31, 2026. Positive adjusted EBITDA of $1.1 million from a negative $1.3 million last year, Q1 2025. Revenue of $6.8 million, reflecting the planned wind down of legacy operation as the company transitions to AI compute and colocation revenues. Balance sheet and liquidity as of March 31, 2026. Cash and cash equivalents of $71.4 million. Working capital of $67.2 million compared to negative $0.8 million at March 31, 2025.

Michel Amar
Chairman and CEO at DigiPower X Inc.

Digital asset holdings of $13.6 million, up 208% year-over-year. Net fixed assets of $26 million, up 29% year-over-year, reflecting capitalized investment at the Columbiana, Alabama facility. No long-term debt. Balance sheet and liquidity as of May 15, 2026. Approximately under $25 million in cash and cash equivalents, about $15 million in digital assets, and approximately $45 million in year-to-date capital expenditure deployed toward GPU equipment and data center build-out, principally at the Columbiana, Alabama facility. Operational highlights. Columbiana, Alabama AI Campus. The company is targeting phase 1 ready for service December of 2026 and completion Q1, 2027. NeoCloudz GPU as a service. NeoCloudz, the company's GPU cloud business, will recognize its first revenue in May 2026 from its initial fleet of NVIDIA B200, B300 GPUs deployed at the company's Alabama facility. Closing message.

Michel Amar
Chairman and CEO at DigiPower X Inc.

Q1 2026 marks an inflection point for DigiPower X. adjusted EBITDA turned positive even as we deliberately ramped down legacy revenue to make room for a much larger AI compute business. Our balance sheet is the strongest it has ever been. We hold approximately $125 million in cash and $15 million in digital assets as of today, with no long-term debt. We have already deployed approximately $45 million of CapEx year-to-date into GPUs and infrastructure at Columbiana. That is the firepower to execute phase one and the operational platform that follows. Thank you for joining us today. We will now take questions.

Operator

Thank you. We will now discuss some questions we had from shareholders with DigiPower X's CEO, Michel Amar. For Q1 2026, can you please discuss the financial results, specifically your cash and cash equivalents as of March 31, 2026?

Michel Amar
Chairman and CEO at DigiPower X Inc.

Good morning, everyone. As stated earlier, we ended up with actually $73 million cash March 31st. With an adjusted EBITDA of positive $1.1 million, compared to negative last year. The adjusted EBITDA is basically all the non-cash item deducted from the net loss. It reflects a disciplined capital management and provide us with enough cash to execute on our phase 1 Columbiana commissioning. It also allows us to leverage our balance sheet to get better debt financing for the future.

Operator

Thank you. Do you have any debts?

Michel Amar
Chairman and CEO at DigiPower X Inc.

As of March 31st, 2026, we continue to maintain a zero debt capital structure. As of May 15, we still maintain that zero debt. We are in discussion with different lenders in order to mitigate dilution. With the strongest balance sheets we've ever had in the history of the company, between cash and cash equivalent of $125 million and digital assets that are unencumbered of about $15 million. We basically have $140 million cash equivalent, and digital assets that we can leverage to get a comfortable debt financing some future data center developments, so we don't tap into the equity dilution.

Operator

Thank you. Can you discuss the decision the company made in 2025 to strategically pivot and transition from crypto mining to AI data centers?

Michel Amar
Chairman and CEO at DigiPower X Inc.

That was the greatest decision we made. The decision to transition from Bitcoin mining to AI infrastructure was the most consequential strategic decision in company history. In 2025, 2 realities that converged. First, the economics of Bitcoin mining had become increasingly compressed and cyclical, while demand for AI compute infrastructure was entering a generational growth phase driven by frontier model training and inference scaling. Most importantly, we have spent years assembling a portfolio of power-rich sites in Alabama, Niagara Falls, North Carolina, Buffalo, and they were uniquely suited to hyperscale AI workloads. It took us about 10 years to accumulate these assets that are fully owned by the company and that are very, very valuable today in a twofold. 1, speed to market.

Michel Amar
Chairman and CEO at DigiPower X Inc.

We don't need to wait for a interconnection with the utility. We, we own the substation. We have utility interconnections. We also generate power through our combined cycle gas power plant that we acquired in 2022. That allow us to be in a very, very strong position in terms of speed to market. That's why one of the reasons that we were able to get a major contract from a major frontier AI company and deliver in a basically record time period by the end of this year.

Operator

Thank you. How is the company positioned to capture AI infrastructure demand at scale as compared to conventional colocation and cloud competitors?

Michel Amar
Chairman and CEO at DigiPower X Inc.

We're not a traditional colo operator. We're not an hyperscale cloud. We believe in the structural advantage for the current AI demand environment. Few points to underpin. We own and control our power. We have a total footprint of power of about 393 MW over 4 sites. We have 2 stream of businesses. 1 is a NeoCloudz GPU as a service, which by the way, we are live as of today, which de-risk greatly our ability to execute. We are actually live and getting AI revenues as of today, through a contract that we signed and announced a few weeks ago.

Michel Amar
Chairman and CEO at DigiPower X Inc.

This is our first NVIDIA B200, B300 GPU as a service offering that we intend to scale up. Then we have the colocation strategy, which is basically a modify lease structure where we basically sign a 10-year deal for $1.1 billion that ensure stability and income without the enormous CapEx of GPUs. Our business model today is to develop both businesses colocation, because we do have the power and sizable power, and GPU as a service because we are vertical and the we try to optimize every megawatt of power we own. Being vertical give us a much bigger revenue stream.

Operator

Thank you. How is the company planning to fund its expansion in 2026 and beyond?

Michel Amar
Chairman and CEO at DigiPower X Inc.

We went through the painful last 6 months of raising capital, therefore diluting the company. Now that we have basically under $25 million of cash and no debt, we can leverage that balance sheet, and we are able now to avoid future dilution or mitigate dilution by financing the growth of our future data centers through debt financing. Having a strong balance sheet helps you to get, you know, better terms in terms of financing. We are thinking about a 70/30 LTV loan to cash. Instead of going from a 100% self-financing, we're gonna go to 70/30% loan to cash financing. We already sign a term sheet with a lender in order to grow our business through smart debt financing.

Operator

Thank you. How much available capacity does the company have in terms of power MW at its various sites?

Michel Amar
Chairman and CEO at DigiPower X Inc.

So far today, we have connected to the grid about 210 MW live connected to the grid that we can turn into AI revenues. We have coming up basically another 180 MW where we should get back our load study by end of 2028. Which will give us a total of about 393 MW of secure capacity across our sites that we own. We also have a LOI that we announced few months ago with a massive power plant in West Virginia of 1.3 GW that now we are better positioned to explore and come to terms, if possible, in order to scale up our business exponentially for 2028, 2029, 2030.

Operator

Thank you. Can you discuss some of the company's key accomplishments year-to-date, specifically surrounding site expansion, 24-month contract signed with SubQuadratic AI, and current balance sheet and liquidity?

Michel Amar
Chairman and CEO at DigiPower X Inc.

The year-to-date was an execution achievement. We executed a bare metal GPU rental agreement with SubQuadratic, a new upcoming lab, and we delivered in a very short period of time and on time. You know, our contract was as of May 15, RFS, and we delivered on time. We believe it was a very incredible teamwork. We teamed up with, you know, the NVIDIA team and Supermicro team and our team in Alabama, and we delivered our first GPU bare metal rental as of today. That was one major accomplishment. The second, we financially developed a very strong balance sheet that we can leverage for our future, and we do not have any concerns of lack of cash today.

Michel Amar
Chairman and CEO at DigiPower X Inc.

We can grow. Third, we signed a massive contract with one of the top, a world top chip maker of $1.1 billion expandable up to $2.5 billion. That give us a steady, predictable revenue for the next 10 years. Also a lot of credibility. Now we are in discussion with many top players for expansion in the next 3 years.

Operator

Thank you. When does the company expect to begin generating its first AI revenues?

Michel Amar
Chairman and CEO at DigiPower X Inc.

Today. We started today. We ended up last night, the first GPU bare metal GPUs to our customer. You know, been working very hard in the last few weeks. We received the GPUs from NVIDIA first few days of May. We tested it, commissioned it, and delivered the GPUs to the customer. We are starting our AI revenues as of today.

Operator

Thank you. How many MW of total live AI infrastructure across the company's multi-site portfolio does it expect to activate in 2026 and 2027?

Michel Amar
Chairman and CEO at DigiPower X Inc.

2026, we expect to expand our GPU bare metal with another few megawatts. Today that first contract that we delivered was a little bit under 1 MW, and we expect to deliver by the end of the year an additional 6 MW. We'll get the revenues potentially last quarter of this year or early quarter next year. We're going to deliver the first phase of this colocation contract December 2026. It's about 15 MW. We'll end up internalizing the second phase, Q1 2027, which would be an additional 25 MG for a total of 40 MW, which will be a running $8 million-$9 million a month run rate for colocation. It's about in GPU, it will be about $7 million-$8 million a month, first quarter of 2027.

Operator

Thank you. What are the company's revenue projections for the next three years?

Michel Amar
Chairman and CEO at DigiPower X Inc.

We don't have a, an issue with power. We do have one of the most important bottleneck for most of the companies to get access to power. We do have access to power. Our strategy is to turn that power into AI revenues. Our goal is to for 2027, be active with 90 MW worth of colocation and basically 10MW, 12 MW of GPU as a service. That would give us a total run rate of $300 million a year. In 2028, we plan to add an additional 50 MW of colocation and 20 MW of GPU bare metal. That would give us a $450 million-$500 million a year run rate.

Michel Amar
Chairman and CEO at DigiPower X Inc.

In 2029, an additional 100 MW of colocation, an additional 50 MW of GPU bare metal that would give us a $800 million-$1 billion run rate per year. This is our goal. It can be accomplished as long as we get the financial strength and the debt financing instruments in place, which we are executing now on the financial side. Our stock is very liquid, so very attractive to the different institutions. We are getting a lot of interest in firms to partner or lenders to partner with us and support our growth. This is our plan for the next 36 months.

Operator

Thank you. That brings us to the end of today's question and answer session. We would like to thank everyone for their participation and interest in today's conference. You may disconnect your lines or log off the webcast at this time, and enjoy the rest of your day.

Analysts
    • Michel Amar
      Chairman and CEO at DigiPower X Inc.
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